Directorate General of Customs Valuation, Karachi has revised customs values on the import of branded coffee sold in retail packing. A new customs ruling issued by the directorate revealed that in exercise of the powers conferred under Section 25-A of the Customs Act, 1969, Customs values of coffee are determined.
Valuation Ruling NO.845/2016 dated 05-05-2016 was determined under section 25(A) of the Customs Act, 1969. M/s Shiraz Corporation requested for revision of subject ruling. Therefore, in order to rationalise the values of subject goods, an exercise was undertaken by the Directorate General of Customs Valuation, Karachi to determine the Customs Values of Coffee in terms of Section 25-A of the Customs Act, 1969.
Meetings were held with the stakeholders of subject goods and representatives of clearance Collectorate, who participated in the meetings. All the stakeholders strongly contended and requested that the said valuation Ruling may be reviewed in the light of prevailing international and local market prices. It was also highlighted that the subject goods are perishable items and therefore have got limited shelf life, consequently, near the expiry dates, these perishable items are sold on sale and discounted prices. It was further contended by the traders that since the subject goods are mainly being sold on super and general stores, therefore, a lot more expenses (shelf rent, marketing expenses etc.) are contributed at retail level which cannot be managed without adding extra value to the subject goods.
The importers contended that all these factors may also be considered in fixing value of subject goods. During market enquiry it was found that prices of the similar product ie, Nestle 3 in 1 sachet manufactured locally are available at lower price as compared to similar imported goods. Prices are also verified on the basis of location of market in the city, date of expiry and being seasonal item. While determining the prices the factors like mode and nature of essential packing have also been taken into account, the ruling said.
It said that the valuation methods provided in Section 25 of the Customs Act, 1969 were duly followed and applied sequentially to address the valuation issue at hand. Transaction value method provided in Sub-Section (1) of Section 25 was found inapplicable because it is generally known to all that the majority of invoices produced at import stage are manipulated/fabricated and hence the requisite information required under the law was not available to arrive' at the correct transaction value. Identical/similar goods value method provided in Sub-Sections (5) & (6) of Section 25 ibid were examined for applicability to determine Customs value of subject goods, this data provided some references, however, it was found that the same cannot be solely relied upon due to the absence of absolute demonstrable evidence of qualities, and quantities of commercial level etc, and also it was observed that same importers provide misleading description while declaring goods, as other types and varieties of similar goods to avoid the application of valuation ruling. Information available was, hence, found inappropriate.
In line with the statutory sequential order of Section 25, this office then conducted a market inquiry using Deductive Value Method under Sub-Section (7) of the Section 25 of the Customs Act, 1969, however, it was found that the determination of Customs value could not be based solely upon this method either. Therefore, valuation method provided vide Section 25 (8) of Customs Act 1969, could not be applied as the conversion cost from constituent materials and allied expenses, at country of export were are not available. Finally, PRAL database, market information and international prices through Web were examined thoroughly. All the information so gathered was analysed for determination of Customs Value of the subject good. Consequently, the Fall Back Method as provided under section 25(9) of the Customs Act, 1969 was applied to arrive at assessable customs values of Coffee.
In cases where declared/transaction values are higher than the Customs values determined in this Ruling, the assessing officers shall apply those values in terms of Sub-Section (1) or Section 25 of the Customs Act, 1969. The Custom values determined in the Valuation Ruling are far the descriptions and specifications as mentioned herein, HS Codes are mentioned for illustrative purposes so that Valuation Ruling values are made accessible to the assessing officers. The values determined vide the Ruling shall be the applicable Customs value for assessment of subject imported goods until and unless it is rescinded or revised by the competent authority in terms of Sub-Sections (I) or (3) of Section 25-A of the Customs Act, 1969.
The Valuation Ruling is appealable under the law and a revision petition may be filed against this Ruling, under Section 25-D or the Customs Act, 1969, within 30 days from the date or issue or this ruling before the Director General, Directorate General of Customs Valuation, 7th Floor, Custom House. Karachi.
The Collectors of Customs may ensure that the values given in the Ruling for the given description of goods are applied by the concerned staff without fail. Any anomaly observed may kindly be brought to the notice of Directorate General immediately.
The new ruling has superseded Valuation Ruling No.845/2016 dated 5.5.2016, the directorate added.